Mortgage delinquencies on the rise in metro Augusta

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Late home payments increased in the Augusta-Aiken metro area in May along with the rest of the nation, according to a California-based real estate analytics firm.

CoreLogic's new Loan Performance Insights Report shows 8% of mortgages in the seven-county metro area were 30 days or more overdue in May. That exceeds the national average of 7.3% and is three percentage points higher than the metro area's 5% delinquency rate in May 2019.

The year-over-year increase in late payments is attributed to the coronavirus pandemic, which pushed the U.S. unemployment rate above 14% in April and caused many homeowners to enter into COVID-19 mortgage-forbearance programs.

"With the sudden loss of income, many homeowners are struggling to stay on top of their mortgage loans, resulting in a jump in non-payment," CoreLogic Chief Economist Dr. Frank Nothaft said in a statement accompanying the data.

Prior to the pandemic, the national unemployment rate was at a 50-year low, and the mortgage industry had seen 27 consecutive months of declining delinquencies.

Despite the economic downturn, mortgage activity in the metro Augusta area has remained strong because of continued demand for new housing, said Holly Lott, a past president of the Augusta Mortgage Brokers Association and branch manager for Silverton Mortgage's local office.

"The first month or two (of the pandemic) was pretty scary because we thought the market would tank," she said. "But we're still insanely busy."

Home sales, which are a barometer for mortgage activity, remain steady in the metro area. The latest report from the Greater Augusta Association of Realtors shows 954 homes were sold in July, which is slightly below July 2019's sales of 963 but well above the 782 homes sold in July 2018 and the 713 sales in July 2017.

Lott said the pandemic has caused lenders to tighten up qualification requirements, such as proof of income. She said her office is now receiving more referrals from other lenders with applicants that fell below their income and credit score requirements.

Lott said any homeowner having trouble making his or her mortgage payments because of pandemic-related income loss needs to contact their lenders immediately to enroll in a forbearance program.

"This is the one time you have a free shot," she said.

Although metro Augusta's overall delinquency rate exceeds the national average, its 3-point year-over-year increase in May was not as big a jump as the national gain of 3.7 percentage points.

And Augusta's gain was mild compared to some other markets, including tourist destinations such as Miamiwh, ich posted a 9.2 percentage-point increase, and cities with less-diverse economies, such as oil-dependent Odessa, Texas, which had a 9-point gain.

CoreLogic forecasts the nation's "serious delinquency" rate, loans that are 90 days or more past due or are in some form of foreclosure, will quadruple by the end of 2021, which would affect roughly 3 million homeowners.

"COVID-19 and the resulting pressures continue to influence the economic activity of many households," CoreLogic CEO Frank Martell said in a statement. "Barring additional intervention from the federal and state governments, we are likely to see meaningful spikes in delinquencies over the short to medium term."

Although metro Augusta's delinquency rate exceeds the national average, its foreclosure rate does not. Only 0.3% of loans in the metro area went through foreclosure in May, mirroring the national average.

Despite the national uptick in delinquencies, foreclosures are still at their lowest levels since January 1999, CoreLogic said.

At the national level, all 50 states saw an increase in their overall delinquency rates, and 75% of all U.S. metro areas saw an increase in serious delinquencies.

Augusta's serious delinquency rate increased three-tenths of a percent in May to 2%, which is a half percentage point above the U.S. average of 1.5% during the same period.

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